As you walk through our offices around 3.30pm each day, you can hear three things:
- The sound of Snickers bars being consumed, in one bite
- The sound of the guy next door complaining loudly to his suppliers on his cell
- The sound of our consultant’s saying ‘WOAAAHHHH!’
Whilst the first two are highly irrelevant, we should focus on the last. The sound of ‘WOAHHHH!’ is usually a sign our team are on calls with new Shopify entrepreneurs. “Why this explosion of emotion” I hear you cry? Well, it’s simple. We always ask 5 key questions to Shopify entrepreneurs before even starting to talk about sexy themes and videos. Yes, this does mean that some clients have to go back to the drawing board, but we don’t believe in building hotels in the desert.
So, how about you? Here are the questions:
1. Have you proved your product or service concept?
Our clients sell a range of products and services. From bicycles to kids school meals to t-shirts. Whilst there are significant differences here, our clients use the following ways to investigate the viability of a Shopify store:
- Physical sales in a bricks and mortar store, that you own or run. High levels of social media engagement for a competing or identical product.
- Clearly defined issues, voiced by customers of a competing product or service that are not present within the product or store you are looking to sell.
- Sales or high levels of requests for the product or service through a social media page.
- A unique back story to your product or service that captures people's attention to you personally.
This isn’t about killing the vibe - it's about security. Whilst Shopify stores offer many people the world over with incredible opportunities, as with any business, a poorly defined offering is a bad start to your journey.
2. Who is your target market?
PLEASE. If you take nothing else from this blog, please take this. Defining your target market impacts on every element of running a Shopify store. Design, development, operations and marketing. Think about the person in your life that you love/admire the most. Do you just love/admire one thing. Unlikely. It probably a myriad of things they do - cooking you eggs on a Sunday, the way they smell of marshmallows, the brightly colored socks they buy you for your birthday. Well, your Shopify store needs to have that myriad of things too, that all align with your target customer. Check out our demographic profiling report for more insights.
3. What do you need financially to make it work?
Yes, we’d all love to be mathematicians with crystal balls, but the reality is that business doesn’t work that way. If you're thinking about running your Shopify store as an addition to your current job or if you’re thinking of running it full time, make a simple financial plan which includes:
- What will I earn per month from other sources than my Shopify store when I launch?
- What is the total sum of things I need per month? - Food, rent, childcare.
- What can I cut out for a few months? - Subscription to GQ, weekly tinder date.
Then simply do the math A - B + C = D (D being the amount you NEED to make from your Shopify store, per month). Oh, and don’t forget to cancel that subscription. Whilst this may seem simple, poor cash flow is always a killer of businesses. Once you have this, work out your break-even point, which will tell you how many of your products/services you need to sell per month. If you sell multiple products or services, create three break-even points at low, medium, high level of spending. Simply plug your figures into the following equation:
Fixed Costs/(Price - Variable Costs)
So, an example:
- Shopify store fees
- App Fees
- Office (if applicable)
- Staff costs (if applicable)
- Email account
- Accounting servicing
- Monthly marketing budget
- Selling price of your product
- The cost to manufacture/purchase the product.
- The cost to ship the product to the customer.
If the figure you get gives you anxiety, cut the fat. Do you really need that office overlooking the river?
4. What’s your budget for starting your business, creating your store AND marketing your store?
It’s very common that entrepreneurs forget about one point of the ‘Golden Triangle’ of Startup, Creation and Marketing. It's an easy trap to fall in, but can be addressed simply.
What is the total sum of funds you feel comfortable in committing, right now, to your business? Take the figure, and then split as follows:
- Startup - 10%
- Creation - 50%
- Marketing - 40%
You’ll probably notice two things.
- Why is Startup so low?
- Why are Creation and Marketing so similar?
Simple. Some of the most successful Shopify stores have been started in Coffee Shops with a 3-year-old laptop. That’s it. The creation and marketing budget? You’ll hear us talking about ‘hotels in the desert’ - the concept is simple, if we create a Shopify store, we need potential customers to see it and want to see it.
5. What tasks will you need to complete when managing your store?
Sure, the dream is of course to build a profitable Shopify store that enables long vacations, and always choosing Steak and Lobster. But before you get there, it’s important to think about the day to day obligations you’ll have in the initial stages of establishing your Shopify store. For example:
- How/when will you fulfil orders?
- Who will create a schedule and post social media marketing?
- Who will respond to customer emails?
- When will you pay your bills/fees?
- How/when will you keep track of competitor activity?
- When will you take the dog for a walk?
Whilst it’s never going to be possible to have an exact plan without the elusive crystal ball, it’s always important to have a clear expectation of the involvement you’ll need to have, and estimated work level. What’s the point in eating that Steak if you're too tired to smother it in A1?
We hope these questions are useful - they give focus and structure to begin mapping out your move into Shopify. If you’d like to talk these through with one of our consultants, just hit the big purple box below, and we’ll make a date.